Legalization Spelling Trouble for MMJ (But It’s Not All Bad)

Call us biased all you want, but it’s hard to find much wrong with marijuana legalization.

Legal adult-use cannabis sales have been good for schools, good for the economy and good for social justice. Jobs have been created, potholes have been filled and teachers and police officers (how’s that for irony) have been hired or kept on the job thanks to tax revenue.

Regulated and taxed cannabis sales haven’t caused a massive crime wave (sorry, Jeff Sessions), haven’t led to hordes of stoned teenagers dropping out of life (Instagram is a much bigger threat to society than weed) and haven’t led to dire political or social consequences for the lawmakers and citizens who supported them.

About the only thing we can name that’s been actively and possibly harmed by recreational marijuana legalization is medical marijuana.

Until recently, consuming, growing, and buying cannabis required a note from a physician and varying levels of state-mandated bureaucracy, depending on the state. As the Las Vegas Sun recently reported, enrollment in various states’ medical-marijuana programs have steadily dropped since marijuana legalization was passed.

In Colorado, registered patients dropped from a peak of 129,000 to 34,000. In Alaska, the number of patients willing to pay for a doctor’s visit and fill out the requisite state paperwork dropped 40.6 percent.

Now, according to CEO Andy Williams, medical customers make up about a third of his base. It’s just too expensive and too onerous to be a patient.

“People don’t want to go through the hurdles to get their cards anymore,” he told the Sun.

But market forces are only part of the reason.

At $200 or more per card, the economics of a medical marijuana recommendation no longer make sense for adults 21 and over, who have no need for specialized medicine (although recommendations and Oregon Medical Marijuana Patient program enrollment will still be very necessary for patients between the ages of 18 and 20 to visit a dispensary).

“It’s hard to make up for a $400 annual card if you’re not always buying a lot of product,” said Eli Bilton, CEO of Attis Trading Dispensary in Portland, Oregon, in comments to the Las Vegas Sun.

At the same time, Oregon lawmakers are steering oversight of the program from the Oregon Health Authority to the Liquor Control Commission, which regulates recreational cannabis. Marijuana producers must decide whether they want to “remain medical” or acquire a license under the recreational system, which has strict rules around product tracking not currently applied to medical.

“In general,” Patterson wrote, “it appears that the legislature ultimately intends to regulate cannabis like alcohol and tobacco, and get out of the cannabis-as-medicine business entirely.”

That won’t matter too much in places like Portland, where marijuana consumers have more than 150 dispensaries to choose from—but it will matter very much in marijuana-unfriendly locales like eastern Oregon, a desolate weed wasteland bereft of dispensaries where everybody—patients and adult-use consumers—are very much dependent on medical growers.

In California, where some medical marijuana dispensaries have been in business for more than a decade, current dispensary operators are upfront about their desire to start selling to all adults 21 and over.

The state plans to start issuing permits for commercial cannabis activity next year. For now, the state plans to issue licenses for both medical and recreational cannabis businesses; the applicant must choose which license to obtain. It seems clear which route most plan to go—recreational.

The state’s most successful entrepreneurs, made rich by cities’ decisions to strictly limit permits for medical marijuana sales, talk openly about the massive recreational market; signage posted inside dispensaries inform curious customers that adult-use sales will replace medical-only as soon as the state starts issuing permits sometime next year.

About the only thing that can keep medical cannabis afloat is a market incentive.

Either medical cannabis has to be cheaper or discounted for patients to justify the recommendation and registration—or the recommendation needs to become cheaper.

In Nevada, where Las Vegas could begin recreational marijuana sales sometime this summer, there are plans to reduce the cost of a medical card to as little as $35. And in California, medical cannabis patients will enjoy some relief from sales taxes levied on recreational customers.

But medical marijuana as a concept and as a reality won’t go away. It can’t. It’s in the nature of the plant, wherever or however it’s acquired.

The only “bad” thing about this development would be if sick people suddenly lost access to cannabis, or if products suddenly became scarce or unaffordable—two things that are unlikely to happen in a competitive marketplace.

For now, it appears the only true casualty is a word. And some paperwork.